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Real Estate Broker Course > Operating a Real Estate Office I > Flashcards

Operating a Real Estate Office I Flashcards

1
Q

T/F

An applicant for a broker’s license in the name of a legal entity must meet all of the qualifications to be a broker.

A

True - DOS will only issue a broker’s license in the name of a legal entity when the person applying meets all the qualifications to be a broker.

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2
Q

T/F
A sole proprietor who wants to run a brokerage and conduct business under their personal name only would need an individual broker license

A

True

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3
Q

What does one need to be licensed as if a broker creates their business as a sole proprietorship and does business under a name OTHER THAN THEIR PERSONAL NAME

A

Trade Name Broker

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4
Q

Marcie Owens has been a real estate sales agent for 10 years and is ready to step out on her own and open “Marcie Owens Realty” Which broker license will she apply for?

A

Trade Name Broker - she has “named” her company “Marcie Owens Realty”.

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5
Q

T/F

Within a corporation, property is owned in severalty as the legal person

A

True

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6
Q

What is ownership in severalty?

A

Occurs when the property is owned by one individual, corporation, or other entity

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7
Q

What are the tax implications of a C Corp?

A

Must pay corporate income tax + when profits are distributed to shareholders, they pay income tax as well

This leads to double taxation

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8
Q

What are the tax implications of a S Corp

A

Does not pay corporate income taxes (functions like a partnership)

Corporation’s income/losses are dived among and passed through to its shareholders.

Shareholders then report the income/loss on their own individual tax returns

*S Corps are not recognized in NYC so they must pay corporate taxes

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9
Q

T/F
A Salesperson licensed with a corporation that holds a real estate broker’s license MAY NOT BE A CORPORATE OFFICER OR OWN ANY VOTING STOCK in that corporation

A

True

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10
Q

General Partnership

A

Partnership in which each member has an equal right to manage the business and share in the profits, as well as equal responsibility for partnership’s debts.

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11
Q

What is the difference between tenancy in common vs. joint tenancy?

A

joint tenancy - the interest of the deceased owner is transferred to other owner(s)

tenancy in common - interest of the deceased owner is transferred to their heirs

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12
Q

What is tenancy in entirety

A

is the interest when a married couple purchases real estate. each party has an undivided interested in the whole property

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13
Q

Are independent contractors statutory employees? If so, why?

A

Yes, they are independent contractors specifically classified as employees by statute for Social Security and medicare taxes

They are not treated as employees for the purposes of income tax withholding.

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14
Q

T/F

A real estate licensee could be classified as a statutory employee by the IRS

A

False

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15
Q

What is an employee?

A

A person whose results are mandated by the employer and the employer controls how the results are accomplished

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16
Q

What is an independent contractor?

A

One who controls the means and methods of accomplishing an assigned task; the paying entity has the right to demand the end result

17
Q

What is a statutory Employee

A

Independent contractors specifically classified as employees by the statute for social security and medicare taxes

18
Q

What is statutory non-employee?

A

One whise services are under written contract that states they wont be treated as employees for federal tax purposes

19
Q

What is Errors and Omissions (E&O) insurance?

A

professional liability insurance that protects licensees from mistakes or negligence

20
Q

What are the 3 classifications the IRS could classify a real estate licensee?

A
  • employee
  • independent contractor
  • statutory non-employee
21
Q

What year was the Sherman Antitrust Act?

A

1890

22
Q

What is the Sherman Antitrust act of 1890?

A

The first federal law outlawing practices considered harmful to consumers, such as monopolies.

23
Q

What year was the Clayton Antitrust Act?

A

1914

24
Q

Why was the Clayton Antitrust act of 1914 passed ?

A

To enhance the Sherman antitrust act by prohibiting specific anticompetitive practices

25
Q

When was the Federal Trade Commission (FTC) Act passed?

A

1914

26
Q

What are the 3 main components of the FTC?

A
  • prevent business practices that are anticompetitive or deceptive or unfair to consumers
  • enhance informed consumer choice and public understanding of the competitive process
  • accomplish this without unduly burdening legitimate business activity
27
Q

What is blockbusting (panic selling)?

A

intimidating homeowners into selling their homes by suggesting that the ethnic or racial composition of their neighborhood was changing.

28
Q

What is illegal per se?

A

a particular act is defined as illegal in the law, either in statute, a constitution, or through case law, and is so obviously harmful to competition that detailed analysis of the activity is not required.

29
Q

What are 4 illegal per se activites?

A
  • price fixing
  • group boycotting
  • allocating customers or market territories
  • tie in agreements
30
Q

T/F

If a local real estate board publishes a suggested commission schedule but does not mandate that members follow it, it would NOT be considered an antitrust violationT.F

A

False - this is price fixing

31
Q

T/F

Two or more brokers who conspire to divide their customers in any way are guilty of violating antitrust laws against allocation

A

True

32
Q

What is a tying agreement (tie-in agreement)

A

when someone tries to make one transaction or agreement contingent on a second transaction or agreement

33
Q

Antitrust laws are in place to ensure that _____

A

competition in the marketplace is fair and unrestrained

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